Expanding nuclear instead of green energy 'could save billions'

Building a new generation of nuclear power stations would be a much cheaper way of meeting the UK's ambitious targets for cutting greenhouse gas emissions than persisting with an expansion of renewable energy, according to research published today.

Building a new generation of nuclear power stations would be a much cheaper way of meeting the UK's ambitious targets for cutting greenhouse gas emissions than persisting with an expansion of renewable energy, according to research published today.

The analysis, by the economics consultancy Oxera, calculates that a new nuclear programme would cost the taxpayer just over £4bn whereas continuing to rely on green energy such as wind power would require £12bn of public support.

The research comes as Tony Blair prepares to seek backing for the construction of up to 10 nuclear power stations should he win the election next week. A consultation document setting out the case for a new nuclear programme is expected within weeks of a Labour victory.

The Government has set a target of reducing the UK's carbon emissions by 60 per cent by 2050 and producing 20 per cent of the country's electricity from renewable sources by 2020.

However, Oxera calculates that by 2025, the UK will be running 40 to 60 per cent short of its carbon-reduction targets, based on past economic performance, unless there is a much bigger shift away from fossil fuel electricity generation than currently envisaged.

Robin Smale, Oxera's managing consultant, said: "At the moment, the two options available are increasing the amount of nuclear-generated energy or increasing renewables at the taxpayer's expense - neither of which will be popular. From the point of view of the taxpayer, nuclear energy may be a strong contender given its costs relative to wind power."

Oxera argues that improvements in energy efficiency and greater "carbon productivity" will not be enough to achieve a 60 per cent reduction in greenhouse gas emissions based on current plans for expanding renewable power.

The Government's aim is to generate 20 per cent of the UK's electricity from renewables by 2020 but Oxera says this would still be insufficient to meet the greenhouse gas targets, achieving a carbon reduction of only 1.2 per cent a year against a required rate of 1.9 per cent.

Expansion of renewable energy will cost £12bn more in net present value terms than relying on conventional fossil-fuelled generation, says Mr Smale. If the UK opted instead for a new nuclear power programme, the equivalent figure would be £4.4bn. This would be split into a £1.1bn injection of direct public capital and the provision of publicly backed debt guarantees worth about £3.3bn. The figure for nuclear does not include the cost of public liability insurance.

Green consumers urged to back £5m wind farm fund

¿ Green households will today be asked to put their money where their environmental credentials are by backing a £5m share issue to raise funds for new wind farms.

The share offer from Triodos, which styles itself as one of the world's first "sustainable" banks, is aimed at individuals rather than City institutions.

The minimum investment is £980 - the amount needed to generate enough electricity to meet the needs of the average household. Triodos is promising investors more than just the warm glow they will get from helping save the planet. It claims the return on investment will be more than 10 per cent within three years.

Triodos also promises that its wind farms will be "sensitively and sensibly sited" so as not to offend those environmentalists opposed to the onward march of the turbines.

Through its Triodos Renewables arm, the bank has financed more than 150 wind farms such as the one pictured above at Moel Maelogen in North Wales.